The BBC are reporting that the Government proposes to cut VAT by 2.5% in an attempt to stimulate the British economy.
Since the G20 summit in Washington there has been speculation of possible tax cuts including
- Increased tax allowances.
- A rebate.
- Increases in payments to those in receipt of tax credits
Whilst this may be a fair and equitable way of reducing costs, in isolation I doubt it is enough, it works out as ~£25 per £1k spent. Hardly noticeable. In addition, the reduction may not be passed on to consumers as retailers, wholesalers, importers and manufacturers swallow the reduction in increased profit margins.
I do hope you have more to offer Mr Brown.
As things stand, most people have received pay-rises well below inflation, the value of the pound is dropping like a stone, jobless figures are rising and so on.
"No more boom and bust"?
The Tories are talking about targeted (funded) tax cuts. This probably is the better policy in the long term. However, many are struggling and can't afford the luxury of thinking long term. In addition, the bank bailout is going to cost us all very dearly as time goes on, why shouldn't the taxpayer have some kind of assistance from this?